Bitcoin expert Max Keiser said that since Facebook announced the launch of GlobalCoin (or Libra), Ripple (XRP) and most other cryptocurrencies should be wary.
In Keiser's view, GlobalCoin will make the competition currency irrelevant, including Ripple (XRP). Bitcoin’s bull market will also see Facebook’s currency eradicating companies that use cryptocurrencies for payments and remittances:
"Facebook's global stable currency… FaceCoin eliminates the need for hundreds of competing currencies, including XRP. The end of the coin is coming."
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How GlobalCoin will promote the development of Bitcoin while destroying Ripple
As currently disclosed, GlobalCoin's purpose is to conduct peer-to-peer payments and other microtransactions. This may put pressure on Ripple's XRP cryptocurrency and rival coins such as Litecoin, whose main selling point is fast, cheap transactions. Payment companies based on cryptocurrencies such as BitPay are also targeting this niche market.
Unlike the competition coins, Keiser expects GlobalCoin to be the gospel of Bitcoin. This is because Bitcoin “competes with gold, not with legal currency”.
Facebook has announced that its digital currency will be linked to multiple currencies, not just the US dollar.
Facebook's well-planned action plan
It is said that this social media giant is particularly targeting developing countries whose domestic currency is fluctuating, and Venezuela and Zimbabwe will soon come to mind.
In addition to Facebook's own main social media platform, this digital currency is also expected to be available through its other applications. This includes WhatsApp and Messenger.
Facebook Messenger's p2p payment function has failed, especially in Europe. In the middle of this month, Facebook is expected to stop the service in France and the UK.
Why is it a developing country?
The reason for Facebook is that GlobalCoin will focus on developing countries with highly volatile domestic currencies, but the goal of this social media giant may not stop there. First, it may help Facebook increase revenues in some of the world's poorer regions. In these regions, Facebook has a fast-growing user base, but average revenue per user (ARPU) is low.
For example, most of Facebook's revenue comes from North America, although most users come from outside the region. For example, in the fourth quarter of 2018, Facebook's 34.86% of revenue came from the United States and Canada. In contrast, the Asia Pacific region contributed 2.96% of its revenue. However, only one country in the Asia-Pacific region – India – has more users than the United States and Canada.
Facebook's ARPU in the fourth quarter of 2018 (by region) | Source: Statista
In addition, developing countries offer more growth opportunities in payments and remittances due to the relatively underdeveloped financial infrastructure.
The release of the Facebook white paper will mark the demise of Ripple? Ripple response
Facebook is expected to launch GlobalCoin sometime next year. However, the social media giant said that GlobalCoin's white paper will be released on June 18.
In the face of Keiser's "Ripple Destruction Theory," Ripple Chief Technology Officer David Schwartz responded by saying:
I like the idea that there is no evidence to show any understanding of XRP. This is just bitcoin's minimalist thinking that only bitcoin and others are considered.